Major Retailers See Shift In Demographics

Simmons Market Research

In a report shared with IBMA today, Simmons Market Research offers some observations on the changes in purchasing habits and attitudes brought about by the recent economic downturns.

Among the changes examined:

• Consumers are more price sensitive in all income categories.
• Discount stores are seeing additional affluent higher income shoppers.
• Higher income people are drawn by "sales" to stores they normally don't shop at.
• Economic factors are constraining the shopping habits of lower income people - even at discount stores.
• Impulse buys are decreasing significantly at lower income levels (below $40K)
• Impulse buys are increasing among higher income levels (above $100K)
• "Mid-scale" retailers, though still experiencing lower sales, are performing better than other major retailers.

The analysis covers a period from August to December 2008.

Personal observation ...

The information seems to follow common sense expectations in an economic downturn, pointing out that lower income people (already shoppers at discount stores) are cutting back, while higher income shoppers appear to be moving their business from upscale retailers to mid or lower scales stores and doing more impulse buying to take advantage of sales.
Of course, higher income people have more latitude to impulse buy regardless of the economic climate ... but they appear to be doing more of it and at places they don't normally shop.

Of special interest, Simmons points out that mid to high end retailers generally promote on the expectation that consumers are willing to pay extra for quality goods. Coupled with sales and discounts on their products, the relative success of mid-end retailers suggests promoting a message of "quality at a discount price" may offer the best opportunity to reach willing consumers.

What does this have to do with bluegrass?

While Simmons analysis was not focused on consumers of music, attending events or other entertainment related factors ... it may still provide some insight.

Consumers are especially sensitive to price right now and as attitudes and buying patterns shift, we may be able to minimize the effects of the downturn by pointing out quality and differentiating our product and/or promoting to new demographic groups.

(NOTE: If anyone would like a copy of the report, I'll be happy to send via email on request.)

For what it's worth ...

Dan Hays
IBMA
1-888-438-4262
danh@ibma.org